Insights
The 2025 corporate lending ecosystem in APAC is poised for a significant transformation, driven by a confluence of macroeconomic factors, technological advancements, and shifting regulatory landscapes.
While many large Asia-Pacific banks are expected to face declining net interest income in 2024 due to margin pressures, a rebound is anticipated by 2025, particularly in the corporate lending sector.
This trajectory is influenced by divergent monetary policies across the region, with Chinese lenders navigating lower rates to support economic growth, while other markets adjust to changing interest rate environments.
The corporate lending landscape is being reshaped by digital transformation, with banks increasingly leveraging artificial intelligence and machine learning for more sophisticated risk assessment and decision-making processes.
Concurrently, there's a growing emphasis on sustainable financing, with climate-related risks playing a larger role in credit disbursements.
Banks are also exploring new revenue streams through digital adjacencies and fintech collaborations, particularly in areas such as trade finance and supply chain management. However, this evolution occurs against a backdrop of tightening credit standards and modest loan growth, especially in sectors like commercial real estate.
As APAC banks strive to balance innovation with risk management, the corporate lending ecosystem in 2025 is likely to be characterized by increased digitalization, a focus on sustainability, and a more nuanced approach to credit risk assessment in a dynamic economic environment.
The corporate treasury ecosystem in APAC is poised for a significant transformation by 2025, driven by a confluence of technological advancements, regulatory changes, and evolving economic conditions.
Treasurers are expected to shift from traditional operational roles to more strategic positions within their organizations, with 80% of finance professionals anticipating an increasingly strategic role for treasury functions.
This evolution will be facilitated by the automation of routine tasks and the implementation of sophisticated AI-driven analytics, allowing treasurers to focus on providing unique insights and supporting business growth objectives.
The concept of real-time treasury is likely to become a reality, with 24/7 cash movements, automatic reconciliation, and instant investment of surplus funds. However, this transformation will occur against a backdrop of challenging macroeconomic conditions, with many large APAC banks facing potential declines in net interest income in 2024 before a projected rebound in 2025.
Treasurers will need to navigate divergent monetary policies across the region, with Chinese lenders adapting to lower interest rates while other markets, such as Japan, adjust to the end of negative interest rate policies.
As the corporate treasury function becomes more data-driven and strategically aligned with business objectives, treasurers will need to balance the opportunities presented by technological advancements with the complexities of a dynamic economic environment and evolving regulatory landscape.
By 2025, test automation is poised to become a critical imperative for the financial industry in APAC, driven by the convergence of digital transformation, regulatory pressures, and the need for operational efficiency.
The automation testing market is forecast to reach $31 billion globally by 2025, growing at a CAGR of 16.22% during 2020-2025, with APAC expected to witness the highest growth rate. This surge is propelled by the increasing adoption of cloud-based automation tools, particularly among SMEs and startups in the region’s burgeoning fintech sector.
The BFSI segment is anticipated to hold a significant share of the automation testing market, driven by the proliferation of challenger banks and neo-banks across APAC.
As financial institutions in the region accelerate their digital initiatives, test automation will play a crucial role in ensuring the quality, security, and compliance of new financial products and services.
Moreover, the integration of AI and machine learning in test automation tools is expected to enhance their capabilities, allowing for more sophisticated risk assessments and improved operational efficiencies.
This shift towards automated testing is not only a technological necessity but also an economic imperative, as it promises to reduce costs, minimize human error, and significantly shorten time-to-market for financial products in an increasingly competitive landscape.
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